KUALA LUMPUR (Aug 20): Allianz Malaysia Bhd's net profit jumped 35.2% year-on-year in its second quarter ended June 30, 2018 (2QFY18) to RM89.87 million from RM66.48 million, as the composite insurer's revenue strengthens.

2QFY18 revenue was up 9.5% y-o-y to RM1.31 billion from RM1.19 billion, as gross earned premiums and investment income rose by RM95.4 million and RM17.6 million respectively.

In its exchange filing today, Allianz said its improved earnings was mainly because of lower management expenses ratio from lower impairment of insurance receivables for its general insurance segment.

"For the quarter under review, the life insurance segment recorded a higher profit before tax of RM40.5 million, an increase of 31.9% or RM9.8 million compared with a profit before tax of the preceding year quarter ended June 30, 2017 of RM30.7 million, due mainly to higher contribution from protection business," Allianz said.

However, its investment holding segment incurred a higher loss before tax of RM1.8 million, compared with RM1 million in 2QFY17, due to agency commission being paid from the shareholder's fund in the quarter under review.

For the first half of the year (1HFY18), the insurer’s net profit stood at RM177.1 million, 32.5% higher y-o-y from RM133.65 million previously; cumulative revenue rose 7.3% y-o-y to RM2.58 million from RM2.4 million.

Moving forward, Allianz said it remains confident in its long-term prospects, although market volatility is anticipated to weigh on the industry’s revenue and profits.

“In the short term, we anticipate some volatility in the market given the change in political landscape and economic policies. In addition, intensifying competition with the ongoing liberalization of Motor and Fire Tariffs is expected to put some pressure on the industry’s revenue and profits.

“However, the general insurance segment will continue to prioritise offering innovative products and services and further expansion of its multi-distribution model to maintain its market leading position,” it said.

As for its life insurance segment, Allianz said it will remain focused on strengthening its multi distribution channels through professionalisation and expansion of its agency force, improving end-to-end sales process digitisation and increasing the productivity of the agency force.

It added that its life business will prepare for the implementation of Minimum Allocation Rate for investment linked products and Balanced Scorecard for its bancassurance channel which are currently slated to be implemented beginning 2019.

Shares in Allianz rose 12 sen or 0.96% to close at RM12.60 today, bringing it a market capitalisation of RM2.23 billion.